June 13 Standard & Poor's Ratings Services on
Thursday revised the rating outlook on Detroit's senior and
second-lien sewage revenue bonds to negative from stable due to
concerns over debt service coverage levels.
"The negative outlook reflects additional risks that the
system may not be able to generate net revenues that provide
more than (one times) coverage on all annual debt service and
pension obligation costs allocated to the sewer fund, as it
did in 2012," said S&P credit analyst Scott Garrigan in a
Coverage levels could be compromised by increased debt
service from 2012 bonds, additional debt to fund improvements
and overall severe economic stress in Detroit, the rating agency
said. S&P rates the senior-lien bonds A-plus and the second-lien
bonds at A.